Indian State-Owned Oil Refiners See Strong Margins For 2018

India state refiners expect their profit margins to hold their strength this year as demand growth accelerates for fuel products amid a record $93 billion spent on infrastructure and stable crude oil prices, company executives and analysts said.

India’s sales of cars and especially motorbikes are forecast to rise rapidly, even as the development of a Delhi-Mumbai industrial corridor drives consumption of the country’s primary fuel products, diesel and gasoline.

The infrastructure programme for fiscal 2018/19 calls for more than 80,000 km (50,000 miles) in new highways to better connect rural areas with urban hubs. Roads and other construction require oil-based products such as tar and plastic piping, and fuel to move materials by truck and rail.

“They (these projects) will have a cascading effect on fuel demand,” said R. Ramachandran, director of refineries at Bharat Petroleum, adding that this would be reflected directly in strong refining margins. Read More…